Knowing how to negotiate and trade will be essential in a post collapse scenario. With no price structures or retail systems in place, all trade will be done person to person. Most people in the Western world never developed these skills, and will be at a big disadvantage.
Apocalypse aside, having these skills is just bad ass. They will help you influence people more deeply, help you make more money at your job, and help you guide your family in a more glorious manner.
As Roger Dawson said in his book, Negotiation Tactics, ”we are negotiating all of the time”. So let’s get down to brass tacks.
The first rule of trade club is, always seek win-win negotiations. It can be human nature to view negotiations as a competition, and in a very real sense, it is. But if talks get too cantankerous, both sides will end up losing. You very likely will have to deal with your trade partners again, or at least someone they know. Having them view you in a good light will allow you to get more and make your life easier in the long run.
A good negotiator isn’t going in trying to get the shirt off of the other side’s back. A good negotiator is trying to get the shirt off of the other side’s back and have them thank him for it.
You can sheer a sheep many times, but skin it only once.
Some Ways to Create Win-Win Situations:
1) If you make the talks about only one issue, such as price, there has to be a winner and loser. If there are more elements involved, each side has the chance to come to an agreement and see it as a win.
2) Realize that two sides don’t always want the same thing- price is not the be all and end all. For example, you may be selling a car and looking for the best price. The buyer may be looking for the security of a warranty, and will happily pay more for this.
3) Try to figure out what they really want. Don’t assume it’s always the same as you, and don’t assume it’s what they’re asking for. If it is different than you, than there is the real potential for a win-win situation.
4) Always start a negotiation asking for MORE than you are willing to agree on. Coming out right away with the offer you’re looking for can be a mistake, as it can make you look inflexible when you won’t budge. Give yourself some room to move down, so the other side can feel like they have “won”. Asking for $2,000 when you think $1,500 is fair is better than coming out for $1,500 right away. It will make you appear more flexible, let them win, and might even get you more money
5) Show sympathy for the other side. “I know you’re not getting the best deal here, but my hands are tied. Let’s get a deal done, and I’ll give you something next time.”
6) Sometimes offering concessions, even nonsense ones, will allow the other side to save face. Promise the payments will always be on time, even a few days earlier. Promise that you’ll be more flexible in future negotiations. Promise that they are the handsomest negotiator ever, and the sky will be blue tomorrow. Often it’s not about the actual concession, just the feeling that they have been respected and not fleeced.
THE 3 STAGES OF A NEGOTIATION
1) Establish the criteria of the negotiations. What does the other side want? Actually ask! Don’t assuming anything. Also create your criteria in their minds.
2) Gather information, both directly from the other side through asking, and through third parties familiar with the other side.
3) Begin looking for areas of compromise. What is of low value to you that may be of high value to them? What do you want that they don’t see as high value?
1) Try to Avoid Making the First Offer: If possible, get them to make an offer first. It is always advantageous to know what the other side is looking for, while your intentions remain a mystery. Information is leverage, as we will explore later. They also may reveal a much better offer than you had expected.
2) Be A Reluctant Buyer/Seller: You want to show as little interest as possible. You’re attitude should be perceived as being hesitant to buy or sell, but curious about the highest/lowest price they can offer. Similarly, never jump at the first offer. You can just about always do better than the first offer given. Plus, if you’re selling something, people will tend to distrust you if you jump at the first offer (what is he hiding? Is the product defective? Can I get it for even less?)
3) Always Trade Off Instantly: An important thing to remember is that the value of a concession decreases rapidly, so get something for it right away. Ask “if I do this for you, what will you do for me?” You will get more for it now then if you bring it up a week later.
Also, never give anything away easily. Always make a big deal of it. Sure, if you’re buying a car, maybe it doesn’t make a difference to you whether it’s automatic or standard. But your seller doesn’t know that. So if he only has one kind, perhaps making him believe you prefer the other can lead to a concession. This will also make the other side less inclined to try and grind you.
On the same note, always negotiate the price BEFORE you do the work. Plumbers and other tradesmen know the value of this. Agree on the price before they realize the job will only take 5 minutes….
4) Momentum is Key: It’s easier to get a yes on something big after you have already received a few on smaller things. So start with the small, easy issues to build some momentum and make agreement more likely later on. Consider even giving up a little bit more than you usually would up front, in the hopes that it will be easier to negotiate a great price later on the important things.
5) The Power of the Printed Word: People tend to believe what they see in writing. Hotels used to have trouble getting clients to leave on time, until they posted check out times on the back of the doors. Once they did, clients would check themselves out punctually an amazing 97% of the time. Always bring printed word into negotiations whenever possible, whether it be a letter from your boss, facts and figures, etc.
6) Diffuse the Competitive Spirit: The last thing you want is a negotiation partner trying to compete with you. Some ways to avoid this:
- Never argue, always agree. Use feel, felt, found: “Many people feel that way. I used to as well, but then I found that…”
- Don’t appear too smart or slick, which will trigger competition. The best negotiators come off as warm, friendly, and possibly slightly below average in intelligence. You didn’t think all car salesmen we’re like that by coincidence, did you?
7) Always Keep Walk Away Power: Make sure you always maintain walk away power, and never get too emotionally attached to a specific deal. Much like martial arts skill, if you have it, others will sense it, and you probably won’t need to use it.
That’s it for today. Stay tuned next week, where we go deeper and look at some specific negotiation techniques and tactics.
Good luck and stay prepared!